A Research On The Financial Risk Management System Of Chinese Listed Companies

Since stock market was initiated in China in the early 1990s last century, it has been afflicted with numerous challenges, difficulties and problems. Most of the first twenty-odds listed companies which once enjoyed nationwide fame and name have gone into obliteration. What has caused the downfall of these public companies? By careful analysis and insightful research, it can be concluded that they were struck with a variety of financial risk management problems in the corporate operations. In view of this fact, the present listed companies should be developed with a keen sense of financial risk management, build and improve their financial risk management system to guarantee their sustained healthy development to achieve excellent performance.However, the present risk management practice aims at identifying, assessing and handling financial risks during corporate financial activities by means of concurrent management which ignores feedback management and doesn't attach sufficient importance to the avoidance and prevention of financial risks before the corporate financial activities.Based on the findings of some pioneering work in this field, this paper presents the thesis that listed companies should place great emphasis on the feed forward management by analyzing the external and internal environments before corporate financial activities and feedback management by improving its financial management, information system and internal control system after those activities so as to set up a sound financial risk management system. Besides, this paper cites Delong Group's financial crisis as an example and analyze its mistakes in the process of feed forward and feedback management from the perspective of financial risk management with the aim to alert the present public companies in China's stock market.